As large as the numbers of loans increasing at the marketplace, the queries in the mind of the borrowers have also increased at lot. They are not just the borrowers rather they have become smart borrowers. They tend to research a lot before going for any loan option. The research usually includes a comparison of the lenders, their lending terms, interest rates and many more. Same practice they follow on both the small term and long term lending options. It is because loans can prevent them from getting deep into the financial gap irrespective of small or large.
When it comes to the small loans like doorstep loans, people have questions in their mind particularly with their existence in the already established online lending marketplace of the UK. Also refer to as the home credit or cash loans, these loans have still been among the most preferred lending options.
Before coming to our main discussion, let’s understand first about the loans.
What are doorstep loans? These small loans are the perfect way of getting instant financial help without travelling anywhere at the marketplace. Borrowers just have to send the loan query and the lender will send its representatives to the borrowers’ home. During the meeting, all things will be discussed and once it gets finalised then the representative hands over the cash to the borrowers’ hands. This is why these loans are also called as home collection loans.
Who Can Apply for Doorstep Loans? Generally, anyone can apply for the doorstep cash loans but most of the times, lenders keep the home credit facility for those borrowers, who fall into these categories:
- Individuals with no job
- Those who do not have any bank account
- People with physical disabilities
- Persons living as tenants
Now it is time to discuss on our main topic…
No, Online Lending Does Not Diminish the Value of Home Collection Loans
It is only a myth, nothing else. One can witness that in the UK, majority of the people have opted for the small loans in which doorstep loans have the largest numbers of borrowers. In fact, these loans have increased their efficacy through digitalisation. It means the borrowers can apply for the loans anytime and anywhere or from their PC, Laptop or Smartphone. Other possible reasons are:
- Borrowers have to use the online access to apply for the loans. It is true that the process will be completed at the living room of the borrowers but still they have to send their loan query on the lender’s website. It signifies that loans need digital platform.
- Majority of the loan providers send their representative to the borrowers’ home in order to collect the repayments. If the borrowers have opted for larger repayments for a longer duration, they can request lender to accept the repayment on monthly basis or can allow automatic deduction from their bank account.
Is everything Positive with doorstep loans?
In the majority of the occasions, these short term loans have worked for the borrowers but they have some setbacks too. Although, there is one thing that we feel to mention here is that these disadvantages of the loans should not become the reason of not to apply for doorstep loans.
- The major issue of debate is the interest rate. When the lender provides the doorstep facility to the borrowers, it tends to ask for more in terms of the interest rates. This may be a setback for the borrowers.
- Only the small amount is allowed to borrow. It is because the lender sends its vendor to the borrowers’ home and thus disbursal of cash will be done there. Carrying the large amount is not possible and thus only small amount is permitted that may go maximum up to £2000.
- When you see at the marketplace, you can find out many other lending options also available providing almost same sort of lending benefits as the doorstep loans. However, they are not for home credit facility but from amount to repayment term, everything is quite similar and gettable in lesser duration due to their entire digital nature.
What’s in the end?
Doorstep loans are just the alternative not the competitor of online or FinTech lending. Borrowers are getting benefits from them. These loans may have advantages and disadvantages but a smart borrower always think with proper analysis and preparation. First of all, you just have to analyse your own situation and then process everything later. You have the backup of the reliable doorstep loan lender but you have your own duties to fulfil.